India’s heavy reliance on West Asian flight corridors severely dented traffic numbers for Indian airlines and airports in March 2026—the latest month for which data is available. The US attack on Iran on 28 February, followed by Tehran’s retaliation, altered the operating environment for the aviation industry in ways few events have before.
The conflict has hit fuel costs—the industry’s main cost. It has also disrupted flight paths and increased operational complexity. From looking at a year of profitability, airlines are now focused on managing losses while hoping for an end to hostilities and a return to business as usual.
Size matters
Indian airports recorded 21% fewer international flights in March 2026, compared to March 2025. Of the 37 international airports that registered flights in March 2025, 31 saw a decline in March 2026.
Data shows a stark contrast between major metro hubs and smaller regional airports. While Kolkata recorded a marginal growth of 0.9%, Delhi and Bengaluru saw milder falls of 3.4% and 8%, respectively.
The damage was in smaller airports, especially in Kerala. Kozhikode saw 54% fewer flights, Thiruvananthapuram 43% and Kochi 42%. Due to its large migrant diaspora, Kerala’s international traffic flows heavily through the Gulf corridor. The airspace closure forced aircraft to fly circuitous, longer routes.
Coupled with skyrocketing jet fuel prices, operating costs on these routes became financially unsustainable. Consequently, airlines aggressively consolidated capacities or cut back operations at smaller, regional airports. In contrast, primary hubs like Delhi and Bengaluru maintained greater resilience through their diversified global aviation networks.
Grounding effect
In the context of the impact of the US-Iran war on international aviation, March was the worst month. Data indicates severe operational shocks as the five Indian carriers, that operate on international routes, implemented sweeping route closures and capacity cutbacks.
The Air India Group, for instance, temporarily suspended regular scheduled flights to major Gulf destinations, shifting instead to restricted ad-hoc operations. The pain has persisted. Earlier this month, Air India also reduced frequency on select international routes across regions for June-August, citing the impact on the “commercial viability of certain planned services”.
Both Air India and its low-cost arm Air India Express were, in fact, grappling with a drop in passenger traffic even in January and February. March made it worse. In contrast, IndiGo, the leader in the Indian international segment, was registering solid growth numbers in January and February. But in March, its international traffic dropped 37%. Akasa’s numbers have benefited from a low-base effect.
West Asia blow
While the four leading Indian airlines reported a decline of between 19% and 66% in international passenger traffic, the global aviation industry showed greater resilience.
Globally, capacity on international routes fell 6.2% in March. Revenue per passenger km (RPK)—calculated as the number of passengers multiplied by the distance travelled by them—fell only 0.6% in March 2026 compared to March 2025.
The breakdown of this number by the six main regions explains the war’s deep impact. The West Asia region, which accounted for 15% of global international RPK in 2025, bore the brunt of this crisis, suffering a 61% drop in RPK in March 2026. Conversely, the other five world regions showed resilience. Africa led global growth (at 19.2%), followed by Latin America (12.1%). Asia-Pacific and Europe, which accounted for two-thirds of global international RPK, both posted decent gains.
Two months later, the situation remains constrained, as airlines work alternate routes in West Asia, and fuel costs remain high.
Viable alternative?
The one geography that saw a 61% drop in RPK in March—West Asia—is also the geography that accounted for half of India’s international passenger traffic in the January to March 2025 quarter.
The United Arab Emirates (UAE) is the biggest country in India’s international aviation segment, accounting for about 5 million passengers, or a share of 26%. Thailand was next, but only at about 1.6 million passengers.
Amid the trials and uncertainty of West Asia, the far east corridor emerged as a highly resilient alternative, remaining completely insulated from the West Asia war.
Five of the top six countries for India by passengers recorded growth in the January to March 2026 quarter, led by Vietnam (up 69% on a year-on-year basis). Even Thailand, on a large base, grew 20%.
Even as leisure travellers increasingly look east, any significant pivot by Indian airlines will take time given the scale of Gulf traffic. The UAE alone handles more passenger traffic than the top six Far East countries combined.
Profit to peril
Since 28 February, when the US attacked Iran, the price of a barrel of Brent crude has increased from $70 to a high of $118. Given that fuel accounts for 30-40% of an airline’s total costs, airlines have increased airfares.
According to aviation research site OAG, average base global airfares for the week commencing 18 April were about 10% higher than in 2025. Since higher airfares lead to lower demand, it will be a worry for airlines.
In December 2025, global aviation grouping International Air Transport Association (IATA) had projected industry revenues crossing $1 trillion for the first time and a record $41 billion in net profit. Those projections are in trouble.
Share prices of major airlines globally, including India’s IndiGo, have mostly declined by up to 10% since the beginning of the war. They have trailed their respective benchmark indices, though not by alarming levels.
The underlying reading of this is that a truce is expected to come through, oil prices would recede to levels where they are profitable for airlines, fares will come down, and people will want to fly again in numbers. For international aviation, much hinges on a lasting truce.
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